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The global bio lubricants market size was USD 3,275.7 million in 2019 and is projected to reach USD 4,514.5 million by 2027, exhibiting a CAGR of 4.8% during the forecast period.
The widely accepted fact about bio-based lubricants is that sustainable and biodegradable base stocks are used to formulate them. The global demand for bio-based lubricants is projected to witness substantial growth during the forecast period due to the growing usage of these chemicals in the transportation & manufacturing industries. The increasing demand for bio-based lubricants is mainly due to the rising awareness and understanding of the environment, the introduction of strict legislation, and the acceptance of these materials by industries. In addition, the introduction of legislation and the rise in government spending on research and development and product innovations are projected to create lucrative opportunities for the market.
Production Shutdown of Automotive Plants amid the COVID-19 Pandemic to Stall Market Growth
The adverse repercussions of COVID-19, beyond the negative effect on volume demand, may result in the postponement or even the extension of regulations regarding conventional lubricants. Meanwhile, the automobile industry in Europe has called on the European Commission to loosen its carbon dioxide reduction goals. In addition, the number of investment inflows will most likely be decreased or halted for most of 2020 because of COVID-19. As laboratories and technological centers have been closed due to the lockdown, new research projects for clients have been put on hold. Bio-based lubricants are likely to play a significant role in facilitating the transition of countries towards a carbon-neutral economy because of their healthy existence and environmental credentials, as well as their increased protection for workers, better efficiency, and lower energy usage. For direct oil cooling in electric vehicles, bio-based fluids might find applications in thermal management. Significant business demand for bio-based products will be created by the eventual introduction of immersion cooling systems by European OEMs.
In view of the downturn in transportation and manufacturing activities, stakeholders in the supply chain of bio-based lubricants have seen substantial effects due to the pandemic. In the transportation business, maintenance intervals, car use, and vehicle purchases plummeted when more individuals started operating remotely. Meanwhile, because of plant shutdowns, the demand for bio-based lubricants also dropped. In response to the COVID-19-induced health and economic emergency, European carmakers had to shut down factories. To deal with the coronavirus outbreak and declining auto demand, PSA Group, Renault, and Fiat Chrysler cut production at their European plants. Renault halted manufacturing through 12 production sites, affecting the livelihoods of around 18,000 workers in France.
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Biodegradable Lubricants to Replace Mineral Oil-Based Lubricants
The positioning of bio-based lubricants as acceptable substitutes to petroleum-based oils can solve several environmental issues. Plant oils and animal fat are gradually being used as renewable raw materials. In the field of lubricants, environmental and economic considerations contribute, after necessary chemical changes, to the use of plant oils and animal fats or used oils and fats. Vegetable oil-based lubricants offer major advantages over their petroleum-based counterparts, such as biodegradability, cost-effectiveness, renewability, and lower environmental impacts. In most industries, mineral oil-based lubricants are commonly used. Lubricant use is immense, and due to leakages, injuries, instability, and overall failure applications, most of the energy is released back into the atmosphere. Fresh lubricants are altered several times before being discarded into the environment. Such losses have severely impacted the atmosphere by allowing air, freshwater, and soil to become polluted. With rising public awareness about the environmental effects of mineral oil-based lubricants, the need for biodegradable bio-based lubricants has increased.
Stringent Government Regulations Governing Oil-based Lubricants to Boost the Market
The U.S. and Europe are the most advanced regions on the regulatory front, having introduced obligatory and optional programs encouraging the use of bio-based materials over the entire service life of goods and services due to their lower environmental impact. The Vessel General Permit (VGP) is the most impactful legislation in North America. Europe has the EU Ecolabel, which is a forum primarily focused on established eco-labels from various European countries, including Germany (Blue Angel), the Netherlands (VAMIL Regulation), and Sweden (Swedish Standard). End-use businesses are eager to introduce lubricants of high quality and outstanding output embodied in lubricants and machines' energy efficiency and extended lifespan. While environmental responsibility and public opinion are important, a secondary focus is given to these facets. If the EU Ecolabel intends to acquire a wider range of end-users, more initiatives targeting price, efficiency, and sustainability will be required. A popular assumption is that stricter standards, such as limiting the use of compounds (including lubricant additives such as intense heat, corrosion inhibitors, and biocides) containing harmful properties required to satisfy efficiency specifications, are of concern to the authorities.
Regulators are imposing tougher requirements for renewability as well. There are signs that the renewable content of 25-50% will rise to 60 percent or even 80 percent in the near future. Although benefiting biosynthetic base stock and the oleochemical synthetic esters, this would exclude the petrochemical synthetic base stock from the bio-based lubricants industry. As the entire lifecycle of a bio-lubricant is being analyzed, including the environmental effects of bio-based lubricants through processing, use, and disposal, a systematic approach is being taken today. Special focus is placed on motor oil for cars. The growing interest in environmental issues would benefit bio-based lubricants, but also from the background of current regulations. Consequently, the current favorable climate for bio-based lubricants makes market players very positive about the sustainability of this evergreen industry.
High Cost of Bio-Based Lubricants and Low Lubricating Properties to Hamper the Market
Vegetable oil-based lubricants are organic and largely biodegradable and can therefore be used as a potential alternative to conventional lubricants. However, their direct use as base oils is constrained by their low oxidative properties, thermal and hydrolytic stability, poor low-temperature properties, and a narrow range of accessible viscosities. Through proper chemical alterations, formulations with antioxidants, and combinations with mineral oils, these drawbacks can be mitigated. However, they contribute to increased costs, contamination, and biodegradability declines. Therefore, it is a great challenge to produce cost-effective bio-lubricants with a groundbreaking combination of biodegradability and high lubricant properties.
The cost of these lubricants is a significant hurdle for the market. In contrast to a conventional lubricant, a bio-based lubricant costs anywhere between 30% and 40% higher. Most bio-based products are priced to compete with mineral oil products that are mid-to-high performance. However, for use in applications where biodegradability, lubricity, viscosity, and fire protection are particularly significant, higher-priced goods can also be justified.
Hydraulic Fluids Segment to Hold a Substantial Share of the Global Market
Based on application, the market is segmented into hydraulic fluids, metalworking fluids, chainsaw oils, mold release agents, two-cycle engine oils, gear oils, greases, and others. The hydraulic fluids segment held the major market share in 2019. In order to improve operations such as harvesters, cranes, tractors, or load carriers in forests, bio-based lubricants are often used as hydraulic fluids. Many manufacturers of bio-based lubricants are mindful of this market opportunity and currently have and/or are designing products that represent areas most vulnerable to spills and applications that are lost in usage.
Another lost-in-use application that requires additional lubrication of chainsaw bars and chains is bar and chain oil. This is a tiny but potentially lucrative segment, provided that the majority of chainsaws are used outdoors and are deployed in environmentally vulnerable areas such as forests and agriculture. In the lubrication of chainsaws, bio-based lubricants are used. Oil is exposed to a centrifugal force during the operation of the instrument and is then extended across the forest floor.
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Automotive and Other Transportation Segment to Expand Rapidly
In terms of end-use industry, the market is segmented into automotive and other transportation, metalworking, mining, forestry, marine, engines, and others. In terms of volume, the automotive and other transportation segment constituted the primary market share. In the automobile and machinery industries, considerable interest is concentrated on maximizing environmental friendliness, longevity, performance, and energy efficiency of lubricant materials. Due to their low toxicity, strong lubricating properties, high viscosity index, high combustion temperature, the extended service life of machines, and others, bio-based lubricants are potential replacement lubricants in the automotive industry.
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Many industries are making successful use of bio-based metal cutting oils and coolants for gear cutting, grinding, and general machining. Bio-based metalworking fluids have several advantages over petroleum-based materials, aside from the environmental benefits such as superior viscosity/pressure performance, lower volatility, higher flash point, less smoke and risk of fire, and others. For the lubrication of forestry equipment, construction vehicles, rail curves, rail flanges, and marine applications, bio-greases are especially suitable. There is a simple loss-lubrication condition in all the above cases, where the lubricating grease inevitably ends up in either soil or water. The market currently consists of many high-performance bio-greases, but the amount generated remains scanty.
North America Bio-lubricants Market Size, 2016-2027 (USD Million)
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The market size in North America stood at USD 1,410.3 million in 2019. North America dominated the market share in 2019 and is likely to maintain its position during the forecast period. A revitalized automotive industry in the U.S. & Canada is expected to drive the global market, along with the growing regulatory interventions by the U.S. government regarding the use of conventional lubricants. As a strategic & basic approach to national defense, which is another guiding force for the market, the U.S. Air Force also encourages the adoption of plant-derived biodegradable products. The rising governmental spending on bio-lubricants used in the marine and automotive industries is likely to create lucrative opportunities for the market.
Asia Pacific is home to major automotive production centers other than developed ones such as the U.S. and Germany. Countries such as China, India, Indonesia, and Thailand manufacture and sell passenger cars and other vehicles to developed regions. The shift of manufacturing facilities to Asian countries is projected to further increase automobile spending and industrialization due to favorable government policies and cheap labor. In addition, a change in the trend towards sustainable, more productive vehicles is expected to fuel the demand for bio-lubricants in the region.
The use of bio-based chemicals in Europe is being encouraged by strict legislation and the ongoing shift towards a bio-economy in countries such as Germany, Italy, the Nordic countries, the Benelux countries, and France.
The growing awareness of biodegradable lubricants in Latin America is expected to drive the market during the forecast period. Moreover, the high growth in major end-use industries such as automotive, mining, metalworking, and others is expected to boost the market in the region.
The fast growth of the base oil industry, combined with rapid industrialization, population growth, and urbanization, is expected to boost the market growth in the Middle East & Africa. Strong demand for high-performance, premium passenger cars has arisen from rapid economic growth, combined with a rising standard of living. Such trends have largely drawn strong investments from international automotive manufacturers, which is likely to fuel the market.
Intense Competition Awaits Small and Medium Players in the Market
The market for bio-lubricants is intensely competitive, with large oil companies battling with independent, small- and medium-sized specialist players. The market is currently in a nascent stage of growth, but with the major share owned by top companies such as PANOLIN, Fuchs, Total, Shell, ExxonMobil Corporation, and BP plc., the market power is strongly concentrated.
Global oil refiners, historically engaged in the manufacture of conventional lubricants, are rapidly supplying biodegradable lubricants for transport applications. In addition to the above-mentioned companies, most suppliers are small businesses based solely on R&D in bio-based lubricants. Several other companies, such as Cargill, Axel Christiernsson, BECHEM, Cortec Corporation, Environmental Lubricants Manufacturing, Inc., Klüber Lubrication, and Novvi, LLC, are active participants in the market.
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The bio-lubricants market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, products, and applications. The report also offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market over recent years.
This report includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the latest dynamics and opportunities in the industry.
Value (USD Million) and Volume (Tons)
By End-use Industry
Fortune Business Insights says that the global market size was USD 3,275.7 million in 2019 and is projected to reach USD 4,514.5 million by 2027.
In 2019, the Asia Pacific market value stood at USD 1,410.3 million.
Growing at a CAGR of 4.8%, the market will exhibit decent growth in the forecast period (2020-2027).
The automotive and other transportation segment is expected to be the leading segment in this market during the forecast period.
Increasingly stringent regulations regarding mineral-based lubricants will drive the market’s growth.
PANOLIN, Fuchs, Total, Shell, Exxon Mobil Corporation, and BP plc are the major players in the global market.
North America dominated the market share in 2019.
Growing government spending on R&D for developing bio-lubricants will aid the market adoption of bio-based lubricants.
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